Corporate Debts

Corporate debts issued by company/corporations to raise money from the public for their operations, expansion, and other projects. It is short term debt.

It provides investor with a fixed interest income.

The debt represents a promise to pay principal amount known as face value or par value.

The company pays periodically semi-annual interest at predetermined rate known as coupon.

Corporate debt can be publicly traded or privately placed with financial institutions.

These facilities can be structured as secured or unsecured debt.

Secured debt: A secured loan is a loan given out by a financial institution wherein an asset is used as collateral or security for the loan.

Unsecured debt: Unsecured loans, like the name suggests, is a loan that is not secured by a collateral such as land, gold, etc. These loans are comparatively riskier to a lender and therefore associated with a high interest rate. When a lender releases an unsecured loan, he does so after evaluating your financial status and assessing whether you can repay your loan.